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tv   Closing Bell With Maria Bartiromo  CNBC  December 3, 2012 4:00pm-5:00pm EST

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but we have markets selling off. we believe people are taking money off the table in anticipation of more clarity coming down the pike. >> we're going out with selling right now, heading out on the low end of the day, down 63 points. more on the republicans' counterproposal on the fiscal cliff coming your way as we get under way with the second hour of the "closing bell" with maria bartiromo. i'll see you tomorrow. hello, 4:00 on wall street. do you know where your money is? welcome back to "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. happy monday to you. this market beginning the new month lower as the gop today puts out a counteroffer on the fiscal cliff. take a look at how we're finishing the day on the wall street. dow jones under water with decline about 60 point. 12,966. last trade on the index. nasdaq gave up some ground today, to the tune of eight points finishing at 3002 on the
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session. and the s&p 500 down 6.70 points at 1409. december a historically good month for the markets. the s&p has risen 8 of the past 1 years in the final month of yeert. with fears of the looming fiscal cliff, can the trend continue? we're bringing in mike from yahoo! finance and cnbc and yahoo! have a business alliance to share and co-produce editorial content and gordon along with bob pisani. gordon will be along momentarily. michael, let me start with you. you say this market's preoccupation with the fiscal cliff is overdone. do you think we go back to the trend and that is that december is a good month on the upside for stocks? >> definitely one of the tail winds. all else being equal, probably definitely a strong point for the market. i think this market is laboring to look through the interim noise. you had decent pmi numbers, with
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the ism disappointing and i think the market is trying to assimilate all this. one thing i take encouragement from, things like junk bonds, small caps have not been phased, treasury yield has not collapsed. that means the economic outlook is not being downgraded with asset markets the way you might expect if they really feared the fiscal cliff was going to hit. >> we certainly don't think consumers are fearing the fiscal cliff because they keep buying and buying ahead of the holidays. >> bob, let me get your take on this. before you go into december as a ho whole, i know earlier there was a fair amount of stock to buy. what happened at the end of the day, bob? >> the important thing is we had a lot of buy-in balances but met with selling. the volume picked up, heading toward 650 million shares. i think heavier on the volume side.
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buy orders were matched with sell orders. we got a counterproposal on the fiscal cliff. the bad news is they are very far apart. the other thing, there's a dawning realization we're in a new era of austerity. american austerity is beginning in 2013 and that's beginning to dawn on a lot of people. >> gordon is with us. let me ask you the same question, what happened at the end of the day here? you had about almost a billion to buy and ended lower. tell us how the end of day finish and what you're expecting. >> end of days have been spectacular here. friday is the craziest closing identify seen down here for a long time. you've seen a lot of activity coming in for the liquidity event, posing imbalances not just being met but reversed. that's the order of trading of the day here going forward. if you look at the month i think we'll see muted action in
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response to what's happening in terms of the fiscal cliff. there's enough arguments to believe it will sustain at these levels but i think we'll pick up serious action in the last ten days of the month and we could see significant volume come down here. >> that's what you want to see and that's what you're expecting end of the month there. let's talk about allocating capital. what do i do in the face of uncertainty, fiscal cliff, global, how do you want to allocate capital? >> we've been advocating clients stay diversified and the clear recollection that central banks had desire to increase wealth effect among stock and bond holders. have you to be careful of long-only actions. we had implemented hedge funds into our investors' portfolios, looking for nondirectional strategies like long short equity, currencies, assets that aren't as directly influenced or don't have as much beta in them
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relative to typical equity and bond portfolio. >> great point. i guess, you know what, if i had to pick who is the face of 2012 for the year, you know how "time" does the person of the year, who's the face of 2012, i would say federal reserve, ben bernanke, he was there all year, stimulus, got to be there till 2015. is that the only thing we have going for us in terms of certainty in this market right here? >> they're certainly the biggest player. you know, we have a fed meeting coming up on the 11th. that will increase volatility in the market -- into the marketplace. that comes back to our desire to ask clients to keep fully allocated to their investments, not try to market time this market too much, given volatility we expect. >> i would agree with your observation, maria. i think one of the big problems we have is if you look at this
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president obama proposaproposal contains fiscal stimulus republicans object to. it will be hard to get fiscal stimulus through this year. monetary stimulus from the federal reserve is very much alive. >> absolutely. let me get your take on what we see happening here because we have breaking news on oracle. once again, more companies paying a dividend this year not waiting for next year because they want to be sure investors have a chance to get attacked at 15% capital gains tax or dividend tax as opposed to much higher because we know that taxes will probably go higher in 2013. oracle is accelerating payments of 2013 dif dens. they're going to pay second quarter, third quarter and fourth quarter dividends this month. gordon, what has that done to trading and investing environment? all these special dividends. oracle is doing it now, second quarter, third quarter dividends this month so investors can get
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taxed at the 2012 dividend rate. >> it's bigger than that because it's not only the corporation themselves but corporate executives. cashing out options looking for preferential tax treatment there as well. that's just prudent corporate management. you can't fault them. stocks paying special dividends have been outperforming the spx in the time period since this started happening. in some ways in the convoluted way it's been a positive for the market. >> oracle is down, though o this news. >> oracle is down right now. gordon, you make a really good point. that's where the performance has been, the conditions paying these special dividends. when i see an announcement like this, you as an investor, would you buy these companies paying special dif depends to make sure the tax rate is a low rate versus what we may see in 2013? >> certainly it might be an opportunity short term, over a
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short horizon. i'm not sure i want to lend to those companies. i'm the bond cio, so i'm not sure i want to lend costco, as an example, a bond issue, a very low rate so they can pay their shareholders. but i understand the dynamics of it. i understand the politics and economics of it. it makes complete sense for them. makes it a tougher hurdle for me as a bond investor to think about lending them money when proceeds are used as a dividend effectively. >> fair enough. thank you, gentlemen. we appreciate it. we'll see you soon. thanks, guys. december may historically be one of the better months of the year for the market but you wouldn't know that today. bertha coombs wraps it up. >> we basically had all but one s&p sector today closing in the red. still had pretty big winners. verisign, registering domain day. dell with the best day of the year on a goldman upgrade.
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p pitney bowes replaces ceo. and equifax buys a company for 1 billion. equifax hitting all-time highs, one of the few that held onto the day's gains. on the downside, netflix. wall street journal piece says big risks in commitment to original programming and what that will mean for profit margins. meantime, materials, the day's worst sector, that weighed on owens illinois. piper jaffray cut outlook seeing same store sales down 30% next quarter. the company will look to make $1 billion in cost cuts in 2013. making that announcement during investor day. exelon, utility, one of the big
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dividend payers not getting much of a boost. with a 6.9% yield. take a look at the stock today, how utilities continue to get hit. back to you. >> isn't that interesting, bertha? 6.9%. who would say no to that in this environment of rock bottom days. is it possible to make money in these companies after dividends are announced? our money pros give you strategies for dividend payers. does the defense industry have any defense if we go over the fiscal cliff and it's starved of billions of dollars in contracts or are massive job cuts unavoidable and on the horizon? then that millionaire next door, he may no longer be a millionaire, or she f we go over the fiscal cliff. our wealth editor robert frank tal lis up the casualties coming up. you're watching "closing bell" on cnbc. this is america.
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who doesn't want a special
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dividend? the hits keep coming. oracle announcing it will accelerate payments on three quarters worth of dividends for investors who hold the stock as of december 14th. now about 100 companies and can counting have announced more than $22.5 billion worth of special dividends in the fourth quarter. presumably to get ahead of higher dividend taxes if the fiscal cliff deal is not out. right now, dividend taxes are at 15%. if we go over the fiscal cliff, they could go up to 44%. today several more companies jumped into the pool, including satellite tv provider dish. what's interesting with many like dish, for example, even if you don't own the stock, you have until december 14th to buy it and still git that special dividend paid out two weeks later. should you be jumping in? should you buy a stock just to capture that dividend? cnbc contributor ron says it's tough to pull off.
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ron s this a smart strategy for investors to pursue? what's your take? >> i expect large i traders can do these things more efficiently than individuals. back in the 1980s japanese investors got special treatment for dividend payments. it was well better than what they got for capital gains. they used to engage in strategy called dividend rolling or dividend capture strategies where they would buy the stock one day before it went ex dividend, captured it, sold the stock later. i would suggest that unless you really want to own the stock, particularly some like dish, i wouldn't try to play around with this stuff because don't forget, the stock goes down by the amount of dividend paid out on a particular day. can you get trapped in some of these strategies by being too cute. >> i hate to go against fundamentals. you're cautious about buying those stocks for special dividends. what are the risks? >> have you to remember, the reason you have a special dividend is because there might have been better than expected earnings or might be some
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restructuring you already announced. it should come out of your cash. right now what's happening with these special dividends is they're not. a lot of companies are borrowing money to do it. when you start borrowing money, that might impact the company's growth moving forward. they want to offer these special dividends. a lot of times it is, because the current shareholders can really cash in on their shares based on current tax rates. like the las vegas sands, ceo owns 51%. he convinced the board to did a special dividend. he pockets $1.2 billion and only pays 15% tax on it. it cost the company $2.4 billion to do that dividend. again, that's the trap. is it really helping the company getting anything from the special dividend? >> that's a good point. in fact, what we're hearing now is that larry ellison will get a sweet payout of about $199 million based on the stock at
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oracle because of this dividend. >> they're accelerating the dividend. he's pulling his income forward, taxed at a 15% rate whichcy smart financial engineering thing to do for anybody who already owns the stock. you don't buy stocks -- typically, historically you have bought stocks for the dividend as part of a total return investment but not for a special dividend or accelerated dividend like in the case of oracle. >> what's your take, ron, on the reason to buy dividend payers? let's say hipt cal we go over the fiscal cliff and dividend taxes go from 15% to 40%. does that take away my incentive and reason to buy a dividend payer? >> yeah. i would buy a stock you expect -- or a company you expect to be buying back shares next year because i expect capital gains tax, there will be a substantial difference between the two. >> it's a good point.
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andre, what's your take on that? do you think we'll see more buybacks as opposed to dividend payouts? who gets hit in the higher dividend tax? >> i think ron makes a really good point. when you come in and buy this stock back, obviously you're delivering the shares so that gives shareholders more profitability on their actual shares. so i think who really gets hurt are the companies buying these companies because they wanted that extra dividend. the price will drop down to where it was before the dividend was announced. unless you're a trader and trying to somehow be sneaky or cute and try to capture a little profit, you might be stuck with a stock that isn't worth owning. >> good analysis. we appreciate your time tonight and we'll see you soon. could going over the fiscal cliff destroy the housing recovery? there's a little nonprovision which could derail the comeback for sure. find out what the head of prudential real estate says. you might want to hear what he has to say in terms of the mortgage market.
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all americans face increase in taxes. to fall off the cliff could decrease the number of millionaires. >> if we go over the cliff, the wealthy would almost certainly become less wealthy. the more important impact is that fewer americans would become wealthy. let's go through the numbers. the u.s. has around 5 million millionaires with a total net worth of $18.8 trillion according to insight in london. if we go off the cliff, next year the population of millionaires would drop by 315,000. their fortunes would drop by $240 billion. if we get a deal but it's bad for the economy, the millionaire population would drop by 26,000 millionaires. if we get a deal and it's good for the economy, millionaires would grow by 230,000 and their fortunes would soar by $1 trillion. yo under score the cost of the cliff, if no threat of a cliff at all, the number of millionaires would grow by
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443,000, a 9% increase. the difference between no cliff and going over the cliff is more than 750,000 millionaires, or about $1.3 trillion in worth, the gdp of canada. i'm looking at the impact of economic growth on millionaires, not attacks which could reduce that growth but a cliff deal alone could be worth $1 trillion in new wealth and new millionaires. another reason why the folks in washington should keep on talking. >> really interesting stuff. so, while we have you, robert, let's talk about what we learned on oracle, announcing plans to pay out second quarter, third quarter and fourth quarter dividends this month. what is ceo larry ellison's cut on this? is it $199 million as reported a minute ago? >> it sounds like it's around $200 million. you had that great interview with him where he's talking about his dream of buying the lakers. this might help him do that. $200 million. his tax savings alone on this, if dividends are now at 15% and they go up to over 43%, his tax
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savings alone, just by doing it this year, over $60 million just on the tax savings. this does make sense for those really big shareholders like larry ellison. >> you know, he's the ceo of the company. so, you know, we could look at him and say, okay, well, he's saving all this money but the savings ripple through, right? >> absolutely. >> if you're a shareholder you're saving a huge amount of money, particularly if the dividend goes to 44%. >> absolutely. his take of this is a tiny portion of the billions of dollars that american shareholders throughout this market are saving. you look at something like sheldon addleson. this is spilling through the market and we'll see a lot of accelerated income for shareholders this year. >> we'll leave it there.
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north rupp grum mond ceo talking about workers could be out of a job. we'll talk to the ceo of a defense contractor company. and then up next, is the housing recovery doomed if we go over the cliff? a new tax that would hit some home sellers that could change everything. i'll talk with the head of prudential real estate investors. [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.
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welcome back. today's construction spending report showing a jump of 1.4% in the month of october. nearly triple the 0.5% expected by analyst. the fiscal cliff looms large. it threatens a lot of this recovery on the recovery. joining me is allen smith, ceo of prudential real estate investors. nice to have you on the program. >> thank you very much. >> what's your take on this whole fiscal cliff discussion. if we go over the cliff, does that undo some good news we're seeing in housing and construction? >> i think with respect to the single family housing market, the impact will be somewhat limited. in the sense that the single family home market has fallen so far. when you look at some of the key indicators today, housing aff d
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affordability is the best it's been. consumer balance sheets have deld deleveraged. excess supply has been dealt with. with every new job there's greater propensity to form households which means people tend to buy homes. going over the fiscal cliff, frankly, i think will delay the recovery in the howing market but certainly won't roll it back to what we saw over the last few years. >> what about higher taxes and particularly, you know, they're trying to figure out what deductions and loopholes to take out of the tax code. if you take out the mortgage interest deduction, does that set the housing market back? >> i think any impediment to people's propensity to buy will delay it. it's not clear to me gate it's
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the key determine ant to buy a home but it's not a helpful fact. it's not something encouraging home buying by any means. >> would you expect that to be one of the exemptions they do away with? >> i would expect there would be an income test for it. i would expect that in that upper income seems to be a target for many considerations on tax. i would expect that that group would be targeted in this respect as well. >> i see. and how significant is that, if you just take that group out of the -- >> well, arguably i think people would contend that's the group most likely to buy a home, whether they get a mortgage deduction or not. >> they'll keep with their plans. what do you think about the story today in terms of walmart, they want to do mortgages right now. looks like they won't right now but a lot of people say that they'd rather get a mortgage from walmart as opposed to the banks. >> i think part of it is as walmart, the largest retailer in the country, has a client base
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with whom they have an extensive relationship. for many people, they may know and trust walmart better than they know and trust one of the major banks in the country. >> that's where the credibility is. >> that's where the credibility comes in. let's face it, wall street and many financial institutions in the current environment are suffering in the eyes of main street. >> so, would you take a mortgage from wall matter? >> i would take a mortgage from whoever would give me the best terms and price. >> i'm glad you just said that. you said at the top of this interview the affordabilityup tf the best time. you look at interest rates, best time, if you want to take out a mortgage right now. but how easy is it to get a mortgage? >> that's the challenge for many people. the affordability is great but your credit history needs to be pristine, you need money for a down payment and that sort of thing. frankly, people are still delevering. a large number of people out of work. that's not necessarily as easy as it sounds for some people. >> what's your take on commercial real estate versus
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residential. it seems credit is still very tight when it comes to individuals. is that the same in terms of commercial or no? >> the financing markets and the commercial real estate industry have recovered meaningfully. they're not back to the levels they were pre-financial crisis by any means. but that's probably a good thing. for the best markets, financing is readily available. and that's reflected in the construction report that came out today. that if you look at the primary commercial sectors, office, industrials, shopping centers, hotels, that sort of thing, the construction activity is very subdued. so -- and part of that is because it's hard to arrange the financing. >> do you think that changes if we go off the fiscal cliff? does that worsen? >> actually, i think the -- going off the fiscal cliff, a lot depends on how we go off the fiscal cliff. if we go off without a parachute
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and crash into a recession, then that's not good for any type of real estate. if we go off with a parachute that looks like a compromise of sorts in 2013 so there's a softer landing, frankly, i don't think commercial real estate is going to be that dramatically impacted in the sense that because of the way where supply and demand are today, even with modest levels of growth, 1% to 2%, market fundamentals will continue to improve. occupancies will increase, rents will rise and it's a good thing for property owners. >> why is multifamily housing so strong? the demand there is very strong, isn't it? >> it's pretty exceptional. it's a combination of factors. it's a combination of demographics, it's a combination of pent-up demand out of the recession and a reflection of the fallen homeownership. people are renting instead of buying. it's interesting. it's also a favored property type among institutional investors. so, there's an active investment
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appetite for that product once it's built. >> i see. good to have on you the program. >> thank you very much. >> allen smith, ceo of prudential real estate investors. up next on the program, defense jobs in the danger zone. ahead, north rupp gr. later, day one of december was a loser for stocks. what about tomorrow? weighing in what moves your money tomorrow morning. >> announcer: time to "toast today's close "with this. with the fiscal cliff and tax rates rising, in november public companies borrowed reported amounts in the bond market in part to help finance shareholder payouts. so, how much in bonds was sold last month? find out next. [ male announcer ] this is joe woods' first day of work.
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president takes to twiter. chief washington correspondent john harwood would details on both. >> reporter: i think this is a step in the right direction in terms of progress toward a deal. the house republicans a few days after treasury secretary geithner went to capitol hill, laid out a plan and challenges republicans to come up with one. i think it shows a willingness to engage in talks with the white house. first of all they only call for $800 billion in revenue, half of what the white house wants. they exclude tax rates from that. they do have some specifics on entitlements which include raising medicare age of eligibility from 65 to 67, something talked about in the grand bargain talks over a year ago. they talk about moving to a different inflation adjustment for social security and other government programs. they also talk about reform of medicare to include private sector competition with a traditional fee for service medicare plan. all of those are things that are
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within the zone of discussion that both -- between the two of the parties. now, president obama went on twitter this afternoon, took questions from the public to try to build pressure on republicans. he got one question from an average person saying, well, will my mortgage interest deduction be threatened by these fiscal cliff talks? and the president used that as a lever to say, that's why rates have to go up, because if they don't, they're going to sister to squeeze middle class deductions. that's the president trying to put pressure on. but i think now that we have offers on paper from both sides, there at least is a prospect we'll have more serious bargaining in the days ahead. >> yes. and that is good news. thank you so much, john harwood with the latest there. more now on the fiscal cliff. one of the industries with the most at stake in the budget debate is the defense industry. in a meeting today in washington, northrop grumman ceo wes bush with a dire warning. >> it would result in across the board cuts to both defense and nondefense accounts.
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and the interesting thing about this is the cuts are not tied to any military strategy whatsoever. it is completely disconnected from a perspective of strategy. in essence these would be meat axe taken to our national defense budgets. >> let's go straight to the front lines of the issue. task specializes in systems, engineering and integrate. president and ceo david langstaff is with us, among the defense contractors speaking out today in washington. he joins me now on the telephone. sir, good to have on you the program. thanks for joining us. >> thank you. glad to be with you. >> what's the potential fallout for task if we go over the fiscal cliff. how would you navigate this? >> first, it's just terrible policy to go over the fiscal cliff. and wes outlined reasons, totally indiscriminate cutting unrelated to strategy. one of the problems is no
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company knows how this will play out. so tasc like others are waiting, creating this uncertainty, pr s paralysis on parts of the government. the answer to your question is, none of us know, which is exactly the problem. >> okay. so right at the outset, let's say hypothetical even if we go over the cliff, how many jobs are at stake in the industry right off the bat? >> other trade organizations have provided that but you're dealing with tens of thousands, hundreds of thousands of jobs potentially. i don't have that data. when you have cuts imposed like that, indiscriminate, half a trillion being imposed on the defense industry, the only way one deals with that -- first of all, it shatters strategy, hurts national security and, of course, it's going to lead to a
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great loss of jobs. >> i guess one area that we should talk about is not just right after we go over the fiscal cliff, right? these are long-term contracts in nature. the defense department has already said they're not going to put out any, you know, sort of warning signs or warning letters to companies until march. so, are you talking about a mid-2013 layoff story into 2014? how does this play off? >> i think, you've got companies that are already trying to conserve cash, making layoffs in anticipation of the cliff. if we cross that line, then 10% reduction in the defense budget will have to play out over the course of the nine months from january through september of 2013. and i dare say, you'll see rolling cuts through this whole time. as the government tries to figure out how to implement this, how industry then tries to react. i mean, it's going to be a blood bath for most of 2013. >> well, let me ask you this,
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because, you know, we talk so much about the layoff part of this story. what about the security of the united states, is that at risk? tell us about the security and how programs or missions around the world get impacted. >> well, i think that -- i'm glad you turned to that because that's exactly the point. national security will be affected, high terrific will be affected. it's it's the federal deficit. it's the federal debt, which is a huge risk for national security. right now the defense department has taken, as i said, about can half a trillion dollars of deduction in the first round but the strategy aligns to the point we can meet national security objectives and still accomplish or make though cuts. if you start putting another half a trillion on top of, that
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you shatter the strategy. and then national security has to be free thought. i propose we need more of a fiscal stairstep reduction so that reductions can be made with strategy in mind. strategy and national security needs have got to be tweaked and done in concert. that's the way to do this. and i think in the end, you know, you're going to have to see reduction -- you're going to have to see more reductions in defense, but hopefully nowhere near the levels that the fiscal cliff and sequestration would impose. >> so, are employees expecting this? i mean, have you to be living under a rock not to see what's going on with the fiscal cliff, but are you planning on laying off employees if sequestration is triggered? >> again, it depends on what the customer chooses to do. the way we communicate to our employees, we provide systems engineering and cyber security and such. we're being very up front with
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our employees. they know what's going on. the culture of our company is to focus on the national security mission of our customers and we'll be there to get that job done and we'll follow the lead of the customer as this plays out. but the government is not even speaking in one voice so nobody knows how this will play out. >> thank you for joining us today, david. we appreciate your insights and very important for our viewers to hear from you. we'll see you soon, sir. >> thank you. >> thank you very much. what does this mean to investors in the defense sector? let's get into it. mike lewis says if sequestration is triggered, it's time to buy. they join me to talk about what's going on in the business. mike, you say all signs point to going over the fiscal cliff. sequestration will get triggered. what does in mean for the business?
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>> i certainly think sequestration is on its way. we don't see anything coming from the house or senate or administration to cause us to change that decision right now. we have about 28 days left before sequestration hits. what we do, we wait for this cliff to hit. you let the sector revalue and you start buying names on almost decade -- multidecade lows on the valuation and look for a good risk return as we progress through 2013. >> so you think -- what you are saying are these stocks will go to multiyear lows? >> that's correct. >> do you agree with that? what's your take on where the stocks go? and then i want to talk about potential layoffs across the industries with both of you. when are these warning notices coming? >> first of all, i think so there are a come of issues. if sequestration actually happens, it impacts funding. it doesn't impact outlays. the impact on 2013 is more likely to be a slope not a cliff.
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it will happen gradually for the weapons systems a little more progressively. today we're just talking about a number. we don't know what programs are associated with that number. once we get the final number, you know, they're going to start taking names of programs that are going to be cut. that's the process that would worry me more than direct financial impact on 2013. and so i would be cautious. i think michael and i are maybe not saying essentially the same thing, that, you know, as you go through that process these stocks could move to newer, lower levels. and then at that point, depending on where the level is and what the outlook is, that might be a better time to buy. we'll just have to see. >> so real quick on defense. mike, do you think security gets impacted, as well as triggering layoffs? >> well, i think that it's two separate questions. first, with regard to security.
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if we see a sequestration event, the multiyear strategy that's just been defined as pacific pivot will probably likely have to be re-evaluated. now we have to go back strategically and figure out, where do we want to redistribute our forces around the world. because i'll tell you, with $500 billion in reductions over ten years, you cannot handle all the different areas they want to operate in over the next ten years. with regard to the security of the united states, i mean, it's depending -- you know, living down here in d.c., the intelligence community, the people that work for the d.o.d., they love what they do, they do it every day and they'll real patriots. but the question is, will they have their jobs at the end of the day. you brought up the point with mr. langstaff, what's the number? well, we figured out that 26,000 to 39,000 are up almost immediately with regard to layoffs, and our 15 coverage companies that employ over 600,000 people.
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that's immediate. >> almost 40,000 jobs immediately. we have breaking news. we appreciate your time. let's get to breaking new with phil lebeau. >> we knew november would have huge auto deals. the monthly sales pace for november, 15.54 million vehicles. that is the highest monthly rate since january of 2008. maria, back to you. >> thank you so much. phil lebeau with the latest there. give us 90 seconds, we'll give you what you need to make money tomorrow. stay with us on that. three of wall street's top money pros are up with their tuesday morning game plan.
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that's merrill lynch. ♪ welcome to the world leader in derivatives. welcome to superderivatives.
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welcome back. want to go back to washington. over to you, john. >> just wanted to correct something i said on air and in a graphic. the republican offer the speaker made today does not include the premium support or voucher plan for medicare. it does include, though, the reduction in the inflation adjustment for social security and a rise in the medicare eligibility age from 65 to 67.
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two other things very quickly. the white house communications director has just put out a statement saying the boehner offer does not meet the test of balance because it doesn't raise tax rates for the wealthy. we also have a statement saying that the republican offer which they are quoting him in making this offer is simply a mid point of proposals and both sides need to come off their fixed position. >> we have 28 days left. thanks so much. as the markets remain laser focused on the fiscal cliff what else should we be watching tomorrow. joining me now to break it down. good to see you. barry, 30 seconds on the clock. what do you want to watch for tomorrow? >> i think the numbers reported are probably the big numbers, the automotive industry. the average age on the street is
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11 years for cars. there is a good possibility auto makers will be responding favorably and the response to the cliff. anything positive would turn the negative emotion to positive emotion in stocks. >> what are we watching? >> i think we will be looking for the bank of canada. no expectation for a rate change. the economy struggling with weak exports and surging loan demand will be an interesting one to watch. the fdic releases its quarterly bank report. that will be interesting to look at. and daniel federal reserve governor speaking at the brookings institution tomorrow. >> we will be watching all of that. what will move our money tomorrow? >> we are watching the vix. i think the vix is the most important. we are going to move every time the paulstitioliticians get on start flirting with each other.
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the vix climbs near 18. >> we'll watch the vix for any indication of that. thanks gentleman. we appreciate it. we will see you tomorrow. thanks very much. up next just 28 days until we hit the fiscal cliff. my observation on what the goal in washington should be to avert the biggest crisis facing our nation and it could be self inflicted next. having you ship my gifts couldn't be easier.
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and finally today my observation on the goals of averting the fiscal cliff. is anyone talking about what we are trying to accomplish here? it seems that the ultimate result needs to be reining in the debt of this country. america owes more than $16 trillion to debtors like china and that number is growing by billions a day. we are spending $1 trillion a more than we take in every year. you can do the math on that and see if we didn't curb that trend. a day of reckoning will come. nearly 100% of the fight in washington has been about taxes and if we should be raising
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rates or getting revenue by limiting deductions for that same group. the president has dug in his heels on this issue. treasury secretary timothy geithner making it clear this weekend there will be no deal if rates do not go higher. i don't understand this insistence. if you want to get $100 from me do you care where i get it from? no. you just want your money and the white house is ready and willing to let america go over the cliff over the way the so-called wealthy pay more. something does not make sense here to me. something else makes less sense, namely that we are spending so much time and energy on the tax issue. if we are serious about cutting our deficit we must be having a frank discussion about medicare. the white house and gop have made proal posals.
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